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Calculating days to determine tax residence in Spain: sporadic absences

Until now, the Directorate General of Taxes (DGT) has stated that, for the purposes of calculating periods of stay in Spain, sporadic absences should be included to determine tax residence. In other words, time spent outside Spain could be calculated as a longer time spent in the destination country, unless the employee’s tax residence in the destination country is reliably accredited with the corresponding tax residence certificate.

However, the DGT criterion has taken an unexpected turn following the Supreme Court ruling of November 28, 2017 (reversal interest), which has laid the groundwork for considering that periods of more than 183 days spent outside Spain cannot be deemed as sporadic absences. In other words, even if the taxpayer does not prove his/her tax residence in the destination country, if he/she spends a period of more than 183 days outside of Spain, this could mean that Spain would not be able to tax the taxpayer for personal income tax.

In short, this line marked by the Supreme Court should establish a clear boundary for when a taxpayer should not be taxed on his/her worldwide income, or whether he/she should only be taxed on the income he/she has obtained from Spanish clients. Perhaps this would open the door for taxpayers to apply for unduly withheld amounts.

If you have doubts about calculating days to determine tax residence in Spain, please do not hesitate to contact our team of professionals.